Refer to Scenario 9

question 282

Multiple Choice

Refer to Scenario 9.1 below to answer the question(s) that follow.
SCENARIO 9.1: Amy borrowed $20,000 from her parents to open a bagel shop. She pays her parents a 5% yearly return on the money they lent her. Her other yearly fixed costs equal $9,000. Her variable costs equal $30,000. In her first year, Amy sold 40,000 dozen at a price of $1.50 per dozen.
-Refer to Scenario 9.1. Amy's profit is

• A) $0.
• B) $20,000.
• C) $30,000.
• D) $50,000.

---

Definitions:

Living Trust

A legal document that places assets into a trust for the grantor's benefit during their lifetime and specifies how to distribute remaining assets after the grantor's death.

Resulting Trust

A trust formed by implication of law when property is transferred under circumstances suggesting the transferor does not intend the transferee to have beneficial interest in the property.

Revocable Living Trust

A legal document that allows an individual to control their assets during their lifetime and specify how these assets are distributed upon their death. It can be altered or revoked.

Constructive Trust

An equitable remedy imposed by a court to rectify situations where injustice would otherwise occur due to wrongful possession of property.